President Donald Trump is making waves in the cryptocurrency world with his plans to expand access to retirement funds and ease taxation for everyday crypto use. According to a recent report by the Financial Times, sources indicate that Trump is considering issuing an executive order that would allow 401(k) retirement plans to invest in cryptocurrencies, gold, and private equity.
This potential initiative represents a significant departure from traditional US retirement policy, which typically limits 401(k) plans to conventional assets like stocks and bonds. By including alternative assets such as crypto, the White House aims to modernize investment options and capitalize on the increasing popularity of digital assets.
A 401(k) is a tax-advantaged retirement plan where US employees contribute a portion of their wages to an investment account. The proposed executive order would direct federal regulators to review and amend existing rules that currently restrict access to alternative assets, potentially opening the door to direct crypto ownership, exposure through ETFs, and investments in blockchain-focused companies.
Omar Kanji, a partner at crypto venture firm Dragonfly, hailed the development as the “biggest unlock” for the digital asset sector. He pointed out that US retirement assets total $43 trillion, with $9 trillion in 401(k)s. If just 1% of 401(k) funds were allocated to crypto, it could result in approximately $90 billion in fresh inflows, signaling a significant opportunity for the crypto market.
In addition to expanding access to retirement funds, the Trump administration is also exploring a “de minimis” tax exemption for small crypto transactions. This exemption would eliminate capital gains tax obligations for minor purchases made using digital assets like Bitcoin.
White House Press Secretary Karoline Leavitt confirmed that the administration is actively considering this policy as part of its efforts to promote crypto usage. Currently, every crypto transaction is treated as a taxable event under US tax law, requiring reporting of even small profits. The proposed exemption would align with existing rules that waive taxes on foreign currency gains under $200, reducing the administrative burden for users making low-value purchases.
Custodia Bank CEO Caitlin Long emphasized the potential impact of this tax exemption, suggesting that it could surpass the significance of the recently approved GENIUS Act, a pro-crypto legislation. If implemented, this exemption could drive Bitcoin’s evolution as a functional payment method rather than just an investment asset.
The potential changes outlined by President Trump signal a significant shift in US policy towards cryptocurrencies and alternative assets, with the potential to reshape the landscape of retirement investing and everyday crypto use.